Andy Burnham pledged to be different from Keir Starmer. He may be worse.
Andy Burnham is spending like Rachel Reeves – this can’t end well (Image: Getty)
Starmer and chancellor Rachel Reeves instantly went on a tax-and-spend spree. Reeves raised taxes by £66billion across her first two Budgets and spent an extra £100billion a year. By 2029, total extra spending under Labour will exceed £650billion. Yet that’s still not enough for our new PM. He began his tenure by instantly unveiling three new spending pledges: scrapping the 5% VAT charge on domestic electricity, capping bus fares at £2 and helping pubs. Popular measures, and relatively modest at around £1.4billion. But the pledges keep coming.
Burnham has promised £442million to tackle rough sleeping, £60million for free 24-hour bus travel for disabled people and £2billion for zero-emission buses in the West Midlands. He’s also lined up a £39billion Social and Affordable Homes Programme. His proposed National Care Service could cost up to £18billion a year. Parliament hasn’t even reopened yet and he’s spending freely, in a way that’s worryingly similar to Starmer and Reeves.
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Almost the first thing Starmer’s government did after winning power was hand public-sector workers a 5.5% pay rise costing £10billion. It also bought off rail strikes with an inflation-busting pay deal, backdated to April 2022. Under the “no-strings” package, Labour ditched Tory demands for an end to generous working practices. Train drivers retained the right to restart their lunch break if spoken to by a manager. Life in the public sector, eh?
No sooner had they banked that than militant unions started threatening more strikes. They know a soft touch when they see one. They’ll be rubbing their hands at the sight of Andy Burnham.
He’s just handed train drivers on the London-to-Manchester route a 3.6% pay rise, above inflation, along with time-and-a-half pay on Sundays and up to £720 for working a fifth day. Other public sector workers will be taking notes.
Increasingly, Burnham is looking like continuity Keir Starmer. We’ve seen that with John Healey’s dishonourable retreat on defence spending. After resigning because Keir Starmer was underfunding our military, he’s now spending the same as… Rachel Reeves. In other respects, he’s going further. Reeves drew up plans to borrow another £9billion a year to fund investment. In the end, she didn’t dare do it. Now it’s on Healey’s Budget list.
She also fought off pressure from the left to hike windfall taxes on banks. Healey is reportedly looking at this too. British banks already pay among the highest taxes in the world at nearly 47%, according to UK Finance. This could destroy jobs and investment in the key financial services sector.
It also sends a terrible signal to the private sector: make a profit and we will punish you for it. There’s talk of hiking windfall taxes on oil and gas firms too, even as explorers exit the North Sea faced with a staggering marginal tax rate of 78%.
Burnham says he doesn’t want to target “wealth creators”. Starmer and Reeves made similar promises before the election. Look how that ended. They also completely failed to cut a penny of welfare. So what’s Burnham doing? Pushing reform into next year. Meet the new boss, same as the old boss. He’ll cost us even more.